After the first tranche of legislation on foreclosures was locked, through the signing of three laws by the President of the Republic Nikos Christodoulides, out of the twelve approved by the Parliament in early April, officials of the Body for the Out-of-Court Settlement of Financial Disputes are working feverishly to implement the changes made to the legal framework.
According to information from "F", the instructions for the submission of complaints that will be submitted to the Financial Commissioner Valentina Georgiadou are expected to be differentiated. At the same time, an information note will be posted on the Agency's website on the additional provisions incorporated into the legislation. Also, the changes and additional options available to borrowers from April 21 are expected to be posted on social media.
Additional protection net
Borrowers have acquired additional tools, as an additional institutional safety net is created. Essentially, it is possible for the process not to lead to the sale of the mortgaged property, but to exhaust the possibility of restructuring and debt settlement.
With the three new laws, two bills and one law proposal by the Ecologists, the binding nature of the decisions of the Financial Commissioner for amounts up to €20,000 is introduced. This is a long-standing demand of borrowers, as it substantially strengthens the position of the consumer. At the same time, they are given the opportunity to ensure, within a short period of time, a decision on complaints concerning loans, investments, insurance contracts and in general services of companies operating in the financial sector.
Also, borrowers can appeal to the Financial Commissioner upon receipt of letter "I" only once, while they have 30 days to settle the debts.
At the same time, the protection of the main residence is further strengthened. Specifically, when the affected person addresses the Commissioner, the sale of the main residence is suspended for sixty days, until the debt is confirmed.
At the same time, after the issuance of a decision by the Financial Commissioner on the amount of the debt, the debtor acquires the opportunity to contact an Insolvency Advisor to draw up a Personal Repayment Plan or to find another appropriate solution, depending on each case.
It is noted that the proposal of the Ecologists maintains the obligation that the auction price cannot be set below 50% of the market value of the property.
Rent Against Instalment
In the meantime, as of yesterday, the submission of applications for the Rent Against Instalment Scheme began again, with the process being completed on July 31. Applications are also available electronically at the district offices of KEDIPES and should be submitted in printed form.
It is worth noting that the criteria, conditions and perimeter of the Plan did not differ from the original design. The Plan was reopened, so that those who did not have time to join the previous times, after intense pressure exerted by the parties on the Ministry of Finance.
Recommendations from the IMF
The International Monetary Fund (IMF) made strict recommendations and warnings about the changes in the legal framework for foreclosures. In his intervention yesterday after the completion of his mission to Cyprus, he spoke out against the changes in the framework of foreclosures, as, as he argued, they could limit access to financing and debt settlement. The IMF states that "while the current system broadly balances the interests of borrowers and creditors, any relaxation that slows down resolution processes could weaken borrower discipline." At the same time, he argued that credit risk could increase and ultimately limit financing to households and businesses, including new homebuyers and small businesses. The Ministry of Finance noted in a statement that any revision of the framework for foreclosures should protect the truly vulnerable, without creating opportunities for exploitation by strategic defaulters at the expense of the economy, consistent borrowers and taxpayers.
